KNOM Radio Missionhttp://www.knom.org/wp
96.1 FM | 780 AM | Yours for Western AlaskaSun, 02 Aug 2015 17:30:09 +0000en-UShourly1http://wordpress.org/?v=4.2.3Marijuana Rules Nearly Final, City Council Prepares to Hire New City Managerhttp://www.knom.org/wp/blog/2015/07/28/marijuana-rules-nearly-final-city-council-prepares-to-hire-new-city-manager/
http://www.knom.org/wp/blog/2015/07/28/marijuana-rules-nearly-final-city-council-prepares-to-hire-new-city-manager/#commentsWed, 29 Jul 2015 00:56:12 +0000http://www.knom.org/wp/?p=17558As new noise, firearm, and marijuana ordinances are readied for public consumption, the city council is preparing to interview two candidates for the city manager job.]]>

As the Nome City Council readies new noise, firearm, and marijuana ordinances for public consumption, they’re also preparing to interview two candidates for the city manager job later this week.

Monday night’s council meeting started with public hearings on the noise and firearm ordinance—the latter allowing the use of a gun within city limits for subsistence or licensed sport hunting—before moving to a lengthy review of the proposed marijuana ordinances, the near-final fruit of labors going back to January. The new rules for legal use and, in the future, sale of marijuana include a provision setting the city council as the “local regulatory authority” for legal pot sales in Nome, an oversight group necessary for the city to take on permitting, and collection of fees, for local marijuana retail licenses.

Nome’s draft marijuana laws. Image: City of Nome. (Click for PDF)

Council member Jerald Brown said he wants to see more than just the council make the rules when it comes to pot shops in Nome.

“My preference would be to break [the authority] up,” Brown said, “and have more than city council on it, and then have that body recommend the next steps.”

Before voting on the draft ordinance, which moves the proposal to a first hearing and public discussion before ultimately a vote, the council agreed that establishing a local authority as quickly as possible would be key; expanding it to include other members of the community beyond the council could come later. The council will stay at the helm, at least for now.

But what of the proposed 10-mile radius of jurisdiction around Nome when it comes to legal marijuana sales? Council member Matt Culley posed the question to city attorney Brooks Chandler on the phone:

“Taxation without representation, you know fist pump in the air thing,” Culley asked. “It makes sense, I mean if they can’t be part of the vote but they get regulated upon by our actions.”

“The extension of city regulations within 10 miles of boundaries is a state proposed regulation. It’s been established under a law that was passed by the state legislature,” the attorney responded, noting that residents outside city limits fall under city laws any time they “interact with [Nome] ordinances.” Those non-Nome residents outside “that live outside Nome had the opportunity to vote for who their local representative at the state legislature was.”

Police Chief John Papasodora told the council passing the local marijuana laws now, even with the state’s final laws for legal pot some ways off, will help set the tone for what’s allowed—and what’s not—when legal marijuana sales eventually start happening.

“It’s a long time between now and November,” the chief said. “The reason you need to have the violations [of the proposed laws] in there right now is to give us, the community, some level of expectations of what is and is not acceptable.”

Papasodora added that the regulations being considered in Nome are based on a template that similarly-sized cities and municipalities are considering across the state in the wake of Alaska’s vote in November to decriminalize marijuana and eventually allow for a legal marijuana industry and market.

Out of the work session and into the regular meeting, the council approved one ordinance updating city rules to comply with international building codes, including amendments to family child care homes that would allow small operations of up to 12 children so long as smoke and carbon monoxide detector requirements and other safety standards are followed. A second ordinance—an agreement with the Nome Volunteer Fire Department and the National Park Service for fire fighting and search and rescue operations—also passed.

Before the meeting could end, council member Matt Culley again called out the Nome Joint Utility Board for failing to produce a new rate structure. Despite several meetings over the past two months, the utility board has not finalized new rates or other measures for the utility—after a temporary rate increase, the utility’s first in decades—sunsetted nearly a month ago.

“We still don’t have a tariff in front of us,” Culley said, “which we’ve been hearing over and over again, ‘it’s going to be in front of us.’ I want to see a tariff in front of us shortly, and if it takes a specialist to come in and do it, let’s do it. Because our utility board isn’t doing it.”

With city manager Josie Bahnke set to depart her job in October—to take over as head of the state’s Department of the Elections—council members debated just how the interview process should go when it comes to interviewing her replacement. After more than 40 minutes of debate, including advice from the city attorney, council members decided to have a public interview process with each candidate.

The two current applicants for the job include current city clerk Tom Moran and former acting city manager and current head of the city’s Parks and Rec department Chip Leeper. Both candidates will be grilled for the job at a public interview on Thursday at 5:30 p.m. in city council chambers. The public is encouraged to attend.

Editor’s note: A version of this story aired on KNOM naming city finance director Julie Liew as a third applicant for the city manager position. Liew has since withdrawn her application.

]]>http://www.knom.org/wp/blog/2015/07/28/marijuana-rules-nearly-final-city-council-prepares-to-hire-new-city-manager/feed/0City Council Approves Fuel Loan; Bahnke to Leave City Manager Jobhttp://www.knom.org/wp/blog/2015/07/11/city-council-approves-fuel-loan-bahnke-to-leave-city-manager-job/
http://www.knom.org/wp/blog/2015/07/11/city-council-approves-fuel-loan-bahnke-to-leave-city-manager-job/#commentsSun, 12 Jul 2015 07:25:58 +0000http://www.knom.org/wp/?p=17285Approving the city utility's annual fuel purchase, Nome's City Council now has to find a new candidate for city manager.]]>http://www.knom.org/wp-audio/2015/07/2015-07-08-NCC-fuel-Bahnke.mp3

Nome will get its fuel for the winter—and it’ll be about $2 million cheaper than it was last year—after the Nome City Council approved a $6 million diesel purchase for the utility’s generators Tuesday night.

This year, however, the city itself will be on the hook for fuel, and not the utility; it’s an added layer of financial assurance to bankers at Wells Fargo and shippers with Vitus Marine.

The money will be held in escrow, essentially held by Wells Fargo for safekeeping until the full delivery—and a final price per gallon—is locked down over the next two weeks for the 2.3 million gallons of diesel. But the city won’t be dumping the $6 million into the escrow account right away. The payments will come gradually, with the utility forking over its monthly fuel payment to the city on the third of every month, in time for the city to pay the bank on the fifth of every month.

In addition to the price being cheaper—due a global glut of oil that’s pushed fuel prices low—Handeland says the utility has secured a lower interest rate of 2.95 percent this year compared to previous years at 3.5 percent. Norton Sound Economic Development Corporation has also offered to reimburse the utility for the interest for the bulk purchase once the debt is paid in full.

The council unanimously agreed to the resolution putting the city’s credit on the line, but Council member Matt Culley added near the end of the meeting that he nearly didn’t. He called on the utility to implement a permanent rate hike—after a temporary rate increase ended last month—to keep the utility working on a path toward financial stability.

“John, I want you to know I almost voted no on this,” Culley began.

Referencing the utility’s long-discussed changes to rate structure, Culley said the final approval for the fuel sale “was going to be our one leverage point to get what [the council] wanted … except we’re kind of under a real ‘squish window’ here. So, I wasn’t going to just stand on my moral high horse for that reason, but, some of those things need to come to a head real quick,” he said.

The council went on to approve one more item: an already-budgeted $140,000 purchase for furniture, fixtures, and equipment for the new museum library and Kawerak heritage center, the Richard Foster Building.

Outside the meeting, there was also big news from City Manager Josie Bahnke: after seven years on the job, she’s opting to not renew her contract. She officially gave the city council 90 days notice, as required by her contract, meaning she’ll be on the job through mid-October. She said, after seven years, it was time for a change.

“I’m proud of all the capital projects that we’ve built, the public safety building, port improvements, and now, the Richard Foster Building,” Bahnke said. “But those are things. I think most of all it’s the people that work here, it’s the people that live in this town, that’s what I’ve been committed to. I think it’s those relationships that I reflect back on, and the team that we built, the team that we built here at the city, I’m most proud of that.”

The council now has to decide how they’ll go about hiring Bahnke’s replacement: either through a local, statewide, or national search. Bahnke said she’s recommending the council look internally at what she calls the “talented, dedicated public servants” already in the region.

]]>http://www.knom.org/wp/blog/2015/07/11/city-council-approves-fuel-loan-bahnke-to-leave-city-manager-job/feed/1DOT Power Line Snag Cuts Power, Internet Along Nome Airport’s Northeasthttp://www.knom.org/wp/blog/2015/06/05/dot-power-line-snag-cuts-power-internet-along-nome-airports-northeast/
http://www.knom.org/wp/blog/2015/06/05/dot-power-line-snag-cuts-power-internet-along-nome-airports-northeast/#commentsFri, 05 Jun 2015 18:16:32 +0000http://www.knom.org/wp/?p=16694As of Friday, backup phone lines and power systems were in use, but internet connections and other instruments at the Weather Service and FAA were not fully operational.]]>

BusinessES and homes out by the Nome airport went dark Thursday morning after a state Department of Transportation accident toppled power lines, knocking out electricity, phone lines, and other communications.

As of Friday morning, backup phone lines were being employed, but internet connections and other instruments and communications at agencies like the Weather Service and the Federal Aviation Administration were not fully operational.

A state Department of Transportation spokesperson said a DOT operator was driving a flatbed truck carrying a piece of heavy equipment Thursday around 8:30 a.m. along Doyle Road, just off Prospect Street along the north side of the airport’s eastern edge.

The road roller caught on what DOT called “low-hanging power lines,” pulling the wires and poles to the ground, breaking three electric poles and bending two others.

Toppled power lines along Doyle Road. Photo: NJUS.

The outage caused the lights to go out—and the phones and internet to go down—at freight companies like Northern Air Cargo, Ryan Air, and Everts. Regional carriers like Bering Air and Ravn Airlines were also impacted but both airlines say no flights were delayed.

Workers at the Alaska Airlines terminal said the power outage also meant ticketing for the midday flight happened the old-fashioned way—manually, without computers—but the flight made it out of Nome on time; in fact, if took off about 15 minutes early.

By Friday internet service remained down at the National Weather Service, the FAA, and the state–run airport office. Those offices were also operating off their own backup generators and phones, but many instruments and communication equipment remained down.

Road closures along Doyle Road remained in effect Friday morning. Nome Joint Utility Manager John Handeland said Friday morning the utility brought in an extra crew that is now working to install the new power poles (the bent poles have since been straightened). The operation, he said, might not be finished until Saturday.

It’s unknown when internet and other communications will be fully restored. Handeland said internet service providers lease space on the power poles and will not be able to attempt to restore service until after the utility’s installation and repair work is completed.

]]>

http://www.knom.org/wp/blog/2015/06/05/dot-power-line-snag-cuts-power-internet-along-nome-airports-northeast/feed/0Marijuana Laws, Rate Hikes for Utility and Port at City Councilhttp://www.knom.org/wp/blog/2015/01/28/changing-marijuana-laws-rate-hikes-for-utility-and-port-at-city-council/
http://www.knom.org/wp/blog/2015/01/28/changing-marijuana-laws-rate-hikes-for-utility-and-port-at-city-council/#commentsThu, 29 Jan 2015 01:13:47 +0000http://www.knom.org/wp/?p=14190Amid discussions of the still-forming city marijuana laws, the Nome City Council also approved an electricity rate hike and operating budget for the city utility.]]>http://www.knom.org/wp-audio/2015/01/2015-01-28-NCC-Pot-laws.mp3

Preparing for legal marijuana, the Nome City Council wants to get ahead of the state’s changing laws, and at Monday’s council meeting Police Chief John Papasodora offered an outline on how to do just that.

“We have two definite sections or stages this has to go through,” the chief outlined for the council. “The first is, how are we going to respond to recreational use. The second is, how are we going to respond to the commercialization, the commercial sale and cultivation.”

Decriminalization of marijuana will hit Alaska in about a month, on Feb. 24, a date set when voters approved a November ballot initiative that called for making the drug legal for anyone over the age of 21. The initiative also clears the way for the eventual legal cultivation and sale of the drug statewide, likely before the end of the year. Chief Papasodora presented the council with a long list suggestions for Nome’s still-developing marijuana laws, most of which were modeled on the city’s existing laws on alcohol. Most focused on limitations on use of marijuana outside the home, prohibiting the use of the drug (much like alcohol) in a public place, or transporting the drug in a vehicle. Papasodora also called for increasing fines to $300 for “open container” violations for both drugs; currently, Nome city code assesses a fine of $100 for similar alcohol violations.

But what about edible marijuana products, and eventually, legal marijuana sales in Nome? And could Nome, as some communities are contemplating, use the “local option” to opt our of marijuana sales in city limits? The chief said, in the end, it will be up to the council to decide.

“The sooner that we act on it, and get our ducks in a row and know how we’re going to approach it from a law enforcement standpoint, we can help modify or monitor conduct to try to bring it within the bounds of what’s acceptable for the city,” Papasodora concluded.

“You just need to decide what the limits are going to be,” he said to the council.

The full list of recommendations from Chief Papasodora can be read here.

The full memo from Nome Police Chief John Papasodora on Nome’s proposed marijuana laws. Image: City of Nome. (Click for PDF file.)

There’s no firm date on when any proposal will be ready for the public to weigh in on, but council member Randy Pomeranz spoke for the council when he said existing liquor laws are the right place to start.

“I think we need to bring it before the public, and I think the chief has got a great idea in just following the alcohol ordinances, it makes perfect sense,” Pomeranz said.

Switching to other business, the council approved a six-month electricity rate increase from Nome Joint Utility. The first rate increase in 20 years, the price will jump by two cents per kilowatt-hour through the end of June, making the new rate roughly $0.19/kWh to $0.20/kWh for most households. Rates will automatically fall back to the previous levels unless a new rate is approved.

The council also passed an operating budget for the utility, one that leaves it running a deficit of more than $87,460. That deficit came alongside updates from Utility Manager John Handeland that some construction projects could demand more money for completion, including the integration of the Banner Wind Farm, at a cost of roughly half a million dollars. Handeland said those project costs could likely be covered by shifting around other project funds, but with the utility in the red, new expenses popping up, and $2.2 million in city credit on the line, council members renewed calls to get a look at the utility’s cash flow.

At the close of the meeting, the council heard from Port Commission member Charlie Lean, who thanked the council for considering a five percent hike for the port tariff.

“Our profit margin is shrinking over the last three years,” Lean said. “There’s a need for us to have some money, and we don’t want to come to [the council] going ‘we’re broke and we need a million dollars.’ So we have to have a little contingency there.”

Members of the public can weigh in on the port tariff hike—before the city council votes on it—at their next meeting on Feb. 9.

]]>http://www.knom.org/wp/blog/2015/01/28/changing-marijuana-laws-rate-hikes-for-utility-and-port-at-city-council/feed/2With New Museum/Library on Budget, City Council Discusses Utility Loans, NSEDC Donationshttp://www.knom.org/wp/blog/2015/01/14/with-new-museumlibrary-on-budget-city-council-discusses-utility-loans-nsedc-donations/
http://www.knom.org/wp/blog/2015/01/14/with-new-museumlibrary-on-budget-city-council-discusses-utility-loans-nsedc-donations/#commentsThu, 15 Jan 2015 00:27:01 +0000http://www.knom.org/wp/?p=13986On budget with the city's new museum, library, and cultural center, the City Council addressed the utility's loans before discussing how to spend an NSEDC donation and how to eventually deal with legal marijuana sales.]]>http://www.knom.org/wp-audio/2015/01/2015-01-14-City-Council-Approvals.mp3

It was a night of approvals at the Nome City Council meeting Monday, advancing the latest for the city’s new museum and library building as well as loans for the utility, but leaving unanswered questions ranging from legal marijuana sales in city limits, to just what to do with an extra $50,000 in community benefit shares from NSEDC.

The council approved a $10.5 million price tag for the city’s new library, museum, and Kawerak cultural center known as the Richard Foster Building. The project is on budget—in fact, the cost is down from an earlier estimate of over $12 million—and the price covers materials, architecture, engineering, permitting, and more. But one item not covered in that price is humidity control for exhibits. It’s something council member Louie Green Sr. said should be part of the building, but something council member Randy Pomeranz said the council decided to cut.

“You’d have to have [that],” Green said, “ivory carvings and stuff like that has to stay in a pretty [controlled] environment.”

“We had taken it out,” Pomeranz responded, “so it’s kind of new to the forefront again.”

It’s a component that could still happen, with roughly $1.6 million as yet unspent for the museum for storage and exhibits, as well as about a half million dollars in contingency funding. Project managers with contractor ASRC SKW Eskimos, Inc. said at Monday’s meeting they are drafting plans on how to use the extra funds, and humidity controls is on the list.

Norton Sound Economic Development Corporation is pledging $150,000 for community projects in each NSEDC member community as part of its annual Community Benefits Share, and that’s $50,000 more than the council had expected. Sue Steinacher with the Nome Emergency Shelter Team was quick to ask for a chunk of the extra money.

“You have been a tremendous supporter of NEST, and you’ve given us $10,000 out of your May budget every year since we got going. And then, when NSEDC started giving the city money, we also would make a request at that point for $20,000, out of which you would give us $10,000,” she said to the council during public comment. “Now I found we didn’t get any money out of the May budget, that it’s being deferred to this NSEDC funds. Given that you find yourself with an extra $50,000, I would like to put in a plug that you maintain the level of $20,000 funding that we’ve gotten from you in the past.”

As mandated by the terms of the NSEDC benefit shares, which requires the funds be dispersed only after going through a public process at the municipal level, the city will take additional proposals from the public for project ideas in the coming weeks.

Shifting gears, the council looked at the ongoing financial issues at the city utility, and its $2.2 million line of credit that’s been used to pay for everything from fuel bills to loans to construction projects. The council unanimously approved changes to two utility loans—one for $1.6 million and another for $1.8 million—meant to recoup costs for water and sewer projects already completed. The loans are essentially unchanged, only the source of the funds is different; both loans are now being issued by the state Department of Environmental Conservation. But changing horses midstream on multi-million dollar loans made council member Matt Culley increasingly nervous.

“We’ve asked for a few things,” from the utility to make financial judgements, Culley said, including inquiries on “cash flow, who owes what, where’s it at, where’s it going … we need to know that cash flow.”

Culley said, with changes to the utility’s credit agreement with the city having already been made once before, he doesn’t want to alter the city’s deal with the utility any further.

“I’ve got to say, I will go on record to say I will not approve any more money going to NJUS on this, on any more surprises.”

To that end, council member Gerald Brown proposed a subcommittee, made up of members from the utility board and the city council, to look at the idea of folding the utility’s accounting system into the city’s.

“I don’t think it’s necessary to really air all the rumored dirty laundry at the council meetings,” Brown said. “We can determine more of the facts first, and the truth of the matter, in a smaller setting.”

Monday’s meeting ended with a question: how should the city of Nome prepare for the impending legalization of marijuana, specifically, if and when the state’s regulations permit legal sales? It was a conversation council member Stan Andersen said needs to happen with the community, and the police chief, before lawmakers in Juneau make the decision for them.

“I think the Chief [John Papasodora] should know sooner or later probably which way the council is leaning when it comes to legalizing the sale of pot. I don’t think we should wait for the legislature to start making up our minds what we’re going to do, we should give an indication of what we’re doing.”

City Manager Josie Bahnke recommended the council wait to meet with the city attorney before deciding on a way forward when it comes to legal pot sales in Nome.

]]>http://www.knom.org/wp/blog/2015/01/14/with-new-museumlibrary-on-budget-city-council-discusses-utility-loans-nsedc-donations/feed/1Nome Lays Out Juneau Priorities as Oil Prices Paint Grim Financial Picturehttp://www.knom.org/wp/blog/2014/12/05/nome-lays-out-juneau-priorities-as-oil-prices-paint-grim-financial-picture/
http://www.knom.org/wp/blog/2014/12/05/nome-lays-out-juneau-priorities-as-oil-prices-paint-grim-financial-picture/#commentsFri, 05 Dec 2014 16:57:16 +0000http://www.knom.org/wp/?p=13361The city's top priority is continuing with ongoing water and sewer upgrades, but even modest projects are uncertain in the face of a potential $3 billion deficit due to falling oil prices.]]>

The City of Nome has set its legislative priorities for the coming year, and facing a bleak financial situation in Juneau, the goals for the city, the school district, and the utility are all deliberately modest.

In a public session with state Senator Donny Olson and Representative Neal Foster last week, the city laid out its four biggest priorities for the coming year. At the top of the list is a $4.3 million request for continued water and sewer upgrades. Nome Joint Utility Manager John Handeland says he also supports growing the Power Cost Equalization program, which for nearly 30 years has helped offset the high cost of electricity in rural areas.

Though he said the bulk of money should go toward replacing Nome’s aging sewer infrastructure, Handeland said he “still support[s] the expansion of eligibility and cap of PCE. I know that’s something that’s been worked on … [and] doesn’t meet with approval from the folks in bigger communities, but nonetheless I think it’s something we should continue to advocate for.”

Emphasizing “shovel ready” projects, the city is also putting at the top of its list a $3 million series of road improvement projects in a partnering with Nome Eskimo Community. The improvements would cover M Street and L Street, as well as 3rd, 4th, 5th, and 6th Avenues.

The city is also seeking state funds—as Nome Eskimo seeks federal funds—to secure a new $600,000 pumper truck for the Nome Volunteer Fire Department. Last, the city is pushing at both the federal and state level for roughly $500,000 to extend and repair Nome’s seawall, a project they city has been seeking for the past two years.

The school district’s own list includes just over $1 million three housekeeping projects, including repaying the district for lighting replacement and the new gym floor at Nome Elementary. The bulk of that million would go toward replacing the high school’s electrical and generator system.

“This is how the electricity gets from the pole to the building. It’s 37 years old,” said School Board President Betsy Brennan, “and needs to be replaced.”

But even with the relatively modest proposals, Representative Foster and Senator Olson agreed that lawmakers face a dire funding situation in Juneau come January.

Rep. Neal Foster, left, and Sen. Donny Olson during a discussion of legislative priorities with the City Council and the public.

The price for a barrel of oil has fallen off a cliff in the last four months: from over $100 per barrel in August, to prices in the mid-$60 as of this week. More than 90 percent of state funding comes from revenues on every barrel of oil, and the precipitous price drop means hundreds of millions of dollars the state expected to be in the bank simply won’t be.

“That’s projected to create a budget deficit of [the] neighborhood of $3 billion just over the next year,” Foster said.

He said that leaves few options: trim budgets, cut projects, and reduce state services, or pursue new taxes that he said are sure to be unpopular.

“Other options, you’ve got sales taxes, income taxes. Nobody likes either of those, but those are on the table,” Foster said. “Permanent funds, you could either stop paying dividends or you could cap permanent funds. It would be very, very unpopular, but there’s quite a bit of money there. But, you know, this is just one of those things that nobody wants to touch but, five years, what are we going to be talking about then?”

Senator Olson sounded a more optimistic note. With Bill Walker and Byron Mallott in office, Olson expects a reorientation when it comes to critical issues in the bush.

“With this new governor, it’s like a breath of fresh air. We’re going to get new commissioners, new deputy commissioners, at least have that opportunity for people that are more able to listen to us, not going to be fighting against the same bureaucrats that we’ve been fighting against.”

The Nome City Council will make final decisions on the city’s priorities in Juneau at their meeting Monday, Dec. 8.

]]>http://www.knom.org/wp/blog/2014/12/05/nome-lays-out-juneau-priorities-as-oil-prices-paint-grim-financial-picture/feed/1City Council Approves $2.2M Line of Credit to Nome’s Utilityhttp://www.knom.org/wp/blog/2014/11/17/city-council-approves-2-2m-line-of-credit-to-nomes-utility/
http://www.knom.org/wp/blog/2014/11/17/city-council-approves-2-2m-line-of-credit-to-nomes-utility/#commentsMon, 17 Nov 2014 19:59:37 +0000http://www.knom.org/wp/?p=12955The City Council and the Nome Joint Utility grappled with the details of a $2.2 million line of credit at a special session Friday, Nov. 14.]]>http://www.knom.org/wp-audio/2014/11/2014-11-17-NCC-NJUS-Loan.mp3

It was a hand-wringing meeting for the Nome City Council Friday as council members and city officials pored over the details—and worked to minimize the risks—of the $2.2 million line of credit the city has extended to Nome Joint Utility.

In the end, the council approved the new line of credit, but not without serious questions about exactly how much is owed, how it would be repaid, and who would oversee the process.

It all started two weeks ago after emergency meetings of the utility board and the City Council initially approved the $2.2 million of credit after the utility failed to secure new loans with its bank, Wells Fargo. But it wasn’t until Friday’s meeting that the details of the city’s credit line to the utility became clear.

“We would not bring this today, to you, if we did not feel confident that we either A, we have a plan in place, or B, that we feel like this is too much risk for the city to bear,” City Manager Josie Bahnke told the council at the Friday afternoon meeting.

Bahnke said the mayor, the utility board, and city administers had begun reviewing the utility’s books, and were confident they had verified existing debts and money due back; confident enough to offer two documents to the council at the meeting Friday, a pledge agreement outlining the conditions of the city’s loan, and a second disbursement agreement outlining how the city would dole out the multi-million dollar credit line.

The disbursement agreement agreed to by the Nome City Council during their meeting Friday, Nov. 14 meeting. (Click for PDF)

But surprises popped up as the council looked closer at the utility’s financial needs. Initially the $2.2 million requested only to cover projects paid for by the utility and awaiting reimbursement through grants, and the council was alarmed to learn on Friday that now—included in the original $2.2 million credit line—there is a payment for the utility’s fuel bill. City Financial Director Julie Liew said that payment is between $500,000 and $600,000, and carries a penalty of up to $25,000 for a late payment.

NJUS Manager John Handeland says that fuel bill was initially covered under the former Wells Fargo agreement, but when that fell through, the utility wasn’t able to make its payment on time. Council member Matt Culley echoed the frustration and anger of many at the meeting as he addressed Handeland.

“We get this on short notice, and you want $2.2 [million], you told us nothing about … this was all about grant reimbursements for us,” Culley said. “Now … we have a $500,000 fuel bill that’s thrown in there, something we don’t know … This is unraveling before us. This has many layers as it gets going. It went from just a line of credit for grants and now that’s not the case.”

Culley said he feared more unknown bills could come due. “What else is there out there that we haven’t seen?”

Handeland and city officials struggled to explain the utility’s bookkeeping, a labyrinth of loans and grants balanced against reimbursements and money made from utility customers. Council member Jerald Brown cut through the confusion and laid it out for everyone at the meeting.

“What’s really happened is: [the utility’s] line of credit got cut off, you’ve been paying it down basically using operations funds to pay for grant expenditures, which really put a damper on the utility’s ability to pay for operational type expenses … [and] it’s exacerbated by the mixing of different types of expenditures within the same accounts.”

That accounting “has to get straightened out,” Brown added, and efforts to do so were exactly what the council demanded: mandating its $2.2 million only pay for projects than can be reimbursed with grants; ordering that all reimbursements go directly to the city; and pushing finance director Liew to have full and unfettered access to NJUS’ books.

Brown also required that an third party rate consultant, already set to meet with the utility, report directly to the council itself.

“I want the rate consultant to report to city personnel, not to NJU personnel,” he said. “I don’t want there to be any appearance of influence exerted on the rate consultant. I’m not saying there would be any actual influence exerted, I just don’t want there to be any appearance there.”

Utility manager Handeland was contrite as he addressed the council, admitting that decreased sales, a depleted savings account, and growing costs have hurt the utility’s finances, while unfilled positions—like a chief financial officer—have left an inordinate amount of work for fewer people to do.

“I’ve done as much as I humanly could do, every day of the week, and there are things I was not able to do. And you know, I take responsibility for that,” he said. “I recognize it, the board recognizes … I’ve just been stretched too thin in the process.”

He added that, “to move forward, we have to have a different structure” at the utility.

After more than an hour it came down to a vote, and the $2.2 million credit line was approved with “yes” votes from council members Stan Andersen, Louie Green Sr., Randy Pomeranz, and Jerald Brown. Council member Matt Culley was the lone “no” vote. Council member Tom Sparks was not present.

It was a tense meeting during which the city grappled with an agreement with potentially huge repercussions, but as the assembled crowd gathered to leave, handshakes and even hugs were exchanged; a sign that all involved are concerned about the impact a multi-million dollar credit line will have the city—and each other.

]]>http://www.knom.org/wp/blog/2014/11/17/city-council-approves-2-2m-line-of-credit-to-nomes-utility/feed/4NJUS Requests, Receives Line of Credit From Nome City Councilhttp://www.knom.org/wp/blog/2014/11/03/njus-requests-receives-line-of-credit-from-nome-city-council/
http://www.knom.org/wp/blog/2014/11/03/njus-requests-receives-line-of-credit-from-nome-city-council/#commentsMon, 03 Nov 2014 18:14:31 +0000http://www.knom.org/wp/?p=12664An emergency work session of the Nome Joint Utility Board was called to order last week, to discuss the utility's finances. It would appear NJUS has a cash flow problem.]]>http://www.knom.org/wp-audio/2014/10/2014-10-30-NJUS-credit-request.mp3

An emergency work session of the Nome Joint Utility Board was called to order last week, to discuss the utility’s finances. It would appear Nome Joint Utility System (NJUS) has a cash flow problem.

For years, NJUS has relied on a revolving line of credit with Wells Fargo bank. Typically, the utility system borrows from the bank to cover ongoing construction costs, while awaiting reimbursement from a variety of grant sources.

A wrench was thrown into that financial reshuffling process last week, when Wells Fargo refused to extend a new line of credit to the utility — at least, until NJUS can pay off its existing line of credit with the bank, which expired in 2013.

This leaves the utility system with bills to pay, and no cash to pay them (at least while it waits for grant reimbursements). So the board met Wednesday to ask city council for a line of credit.

Nome city manager Josie Bahnke also attended the session, and addressed the board after a motion to request 2.2 million dollars in “interim” funds from the city was approved.

She said city council would financially support the utility, but urged the board to take seriously their commitment to repay borrowed money — emphasizing the fact that city council doesn’t have cash to spare.

“This 2.2 million is coming from our city savings accounts that have been designated for our employees retirement system, and for our self-insurance fund,” she said, explaining the money is meant for city use in an emergency — not as a loan.

Bahnke said she is disappointed by the financial situation that led to this request.

“This is not where we want to be. It makes me sad; it makes me scared. So I hope the utility board isn’t just asking for this, but is also willing to make the really tough decisions to get your finances back in order,” she said.

Those “tough decisions” likely include cutting expenses at the utility — and more direct involvement from city finance director Julie Liew.

Currently, the Nome city council and utility board operate under separate financial management — with utility manager John Handeland stepping in as Chief Financial Officer amid accounting staff shortages. But Liew said it could be time for that separation to change.

“Maybe should we consider consolidating the accounting system, between NJUS and the city, for us to actually have a direct oversight on looking at the books and just providing a check and balance in that regard,” she said Wednesday.

While the terms of any credit agreement have yet to be solidified, Liew said city oversight of utility spending may be a stipulation. With details pending, city council members approved a line of credit to the Nome Joint Utility System on Wednesday, in an emergency work session of their own.

]]>http://www.knom.org/wp/blog/2014/11/03/njus-requests-receives-line-of-credit-from-nome-city-council/feed/2$5.6M Grant Helps Kipnuk, Noatak with Soaring Energy Costshttp://www.knom.org/wp/blog/2014/05/09/5-6musda-grant-helps-kipnuk-noatak-with-soaring-energy-costs/
http://www.knom.org/wp/blog/2014/05/09/5-6musda-grant-helps-kipnuk-noatak-with-soaring-energy-costs/#commentsFri, 09 May 2014 21:36:35 +0000http://www.knom.org/wp/?p=8917Communities in western Alaska are sharing more than $5.6 million in federal grants to relieve soaring energy costs.]]>http://www.knom.org/wp-audio/2014/05/2014-05-09-USDA-Energy-Grants.mp3

Communities in western Alaska are sharing more than $5.6 million in federal grants to relieve soaring energy costs.

The money is through of the federal Department of Agriculture’s Rural Development wing. The High Energy Cost grant program offers funds to relieve energy prices in areas that are more than 275 percent above the national average. For electricity, that average is $0.26 per kilowatt hour.

In Alaska, the big winner of the annual grant is the Yukon Delta community of Kipnuk, about 100 miles southwest of Bethel. The USDA is giving the village’s utility $2.97 million for energy projects that combine wind, heat, and diesel power. Kipnuk Utility manager Sam Carl confirmed the funds will go toward three wind turbines and about 100 thermal stoves.

“In my area here our kilowatt hour is about $0.61,” said William Igkurak, who owns Chaninik Wind Group. The wind group is helping Kipnuk purchased the thermal stoves, which use wind power to heat large arrays of bricks. The stoves can be fully charged within a day, and they can provide heat for three or four days.

“Once you turn the stove on, there’s enough stored energy to heat up (a room) in a matter of minutes,” Igkurak said. That could bring costs for energy down to “about ten cents per kilowatt hour,” he added.

In all, the USDA grant claims the Kipnuk project will lower home heating fuel use by 8,800 gallons and reduce the fuel required for powering the community by up to 40 percent.

The grant is also providing relief in Noatak—more than 580 miles north of Kipnuk—where tribal administrator Herbert Walton says every ounce of fuel, from gasoline to diesel for the town generators, has to be flown in.

“We haven’t had a barge in over 20 years,” Walton laughed. “River’s too shallow for a barge. Everything is flown in. It’s $8.99 for the stove oil, same price for the gas. All the building material, all the food and fuel, all that’s flown in.”

Noatak is part of AVEC, the Alaska Village Electrical Cooperative that serves 55 communities in Alaska. The grant gives AVEC over $358,800 to replace a diesel engine that’s 23 years old. The replacement generator is billed as more fuel-efficient, and will have a marine manifold that can recover waste heat from the engine.

With electricity in Noatak at $0.81 cents a kilowatt hour, AVEC president and CEO Mira Kohler said the new generator will help trim energy bills, if only slightly.

“It will allow for the use of more energy out of the same amount of diesel, hopefully displace some gallons of heating fuel, and reduce the number of gallons that we use to generate electricity,” she said. “So the cost of electricity should go down slightly, close to a ten percent reduction.”

The Denali Commission, a federal agency providing utility services in many areas of the state, is getting the remaining $2.3 million for new facilities in several rural communities.

A spokesperson for the USDA in Alaska said the last time one of the rural energy grants was awarded was in 2012.

The morning of our press deadline for this month’s newsletter, the KNOM staff came into the studio building to an unpleasant surprise: no water. None of the faucets, water fixtures, or toilets in the building had any water pressure. Not a drop.

Our local public utility identified the culprit to be a frozen pipe caused by a failed circulator pump (pictured); even in mid-October, temperatures in Nome had already fallen well below the freezing point long enough for frozen pipes to become a problem.

While the water-pressure issue at KNOM was resolved relatively quickly – we had free-flowing water again by late morning – this incident is but a prelude of things to come for so many in our region.

This winter, many of our listeners will face freezing pipes – and in temperatures much colder than those in the fall. In blizzards or deep cold snaps (temperatures of -20°, -30°, or colder), many homeowners will experience problems with their heating systems. Power outages are relatively common, even in winter – although some in our listening range live permanently without electricity or running water.

These daily challenges spur us on to help thousands of families across Western Alaska. Living in the Alaskan bush is not easy – in winter, especially. But we believe that by providing timely weather forecasts, accurate news reporting, and urgent community announcements, we can make a positive difference in the lives of our listeners. You are making that difference, too – every day. Thank you.

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This article is part of the November 2012 edition of our newsletter, The Nome Static.